When we updated last on the most recent happenings in Shanghai (and now various adjoining provinces) as a result of the spread of the H7N9 bird flu, which has so far taken 6 lives, we warned that it is “starting to have major spillover effects on the broader economy, such as mass slaughter of poultry at local markets – a move which will have certain inflationary effects to an economy already on the cusp of losing the war with the G-7’s hot money.”

Indeed, while the human casualties may be promptly contained, it will be the downstream effects on the economy that will have long-term reverberations. As SCMP reports, following yesterday’s spot checks at various closed Shanghai poultry markets, the H7N9 strain has been found to have infected local chickens. “The ministry said last night that 10 chicken samples from two markets in the Minhang district of Shanghai and at the Huhuai Farm Products Market in the adjacent Songjiang district had tested positive for H7N9. The virus was also found in two pigeon samples and seven environmental samples collected from these markets, out of a total 738 samples tested.”

The result has been widespread culling of chickens both in Shanghai and elsewhere, and while the government has been “generous”, promising to pay vendors “compensation equal to at least 50% of the market price of the poultry slaughtered”, the result is a complete collapse in all chicken-related sales. Continue reading »